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7 Sep 2018

Starling Bank launches current accounts for 16-17 year olds

Is it worth going for?

Digital challenger bank Starling has lowered the age limit on its current account, allowing teenagers aged 16 to 17 to sign up.

The move comes just weeks after rival Monzo, another app-only mobile bank, announced it was opening up its current account to over 16s.

Which? explains what the mobile-only challenger banks can offer teenagers and how they stack up to other options available.

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What the Starling Bank account offers teens

The Starling Bank current account comes with all the features of the account for adults, apart from access to an overdraft or a loan.

You'll be able to earn 0.5% AER interest on balances up to £2,000 and 0.25% AER on balances above £2,000 up to £85,000.

Plus, there are no fees for spending or cash withdrawals when using your debit card abroad.

The account also provides real-time notifications, as well as the ability to categorise spending to track your outgoings and set goals to encourage you to save.

Paying people back is also easy. Starling users can now transfer money to each other when they're standing close by using Google Nearby technology. Other features of the app include the ability to freeze your card if you lose it and unlock it if you happen to find it again.

You'll get a contactless Mastercard to spend with (compatible with Apple Pay, Samsung Pay, Google Pay, Fitbit Pay and Garmin Pay), which has an unusual vertical design.

Starling Bank claims the design is safer as key details like your name, card number and expiry date are more discreet - hidden at the back rather than on the front of the card.

Starling Bank has an unusual horizontal design for its debit cards

How to open the Starling bank account

The Starling Bank account is quick to open. You just need to download the app from the official Android or iPhone app store on your smartphone, fill in some details, record a short video and supply some photo ID. The whole process should take five minutes.

You'll get a sort code and account number, allowing you to set up standing orders and Direct Debits.

You'll also get a digital debit card that you can use straight away until your physical Mastercard comes through in the post.

What the Monzo account offers teens

App-based rival Monzo has also lowered the age you can access its current account to 16.

Like Starling Bank, those aged 16-17 won't be able to get an overdraft and Monzo says gambling will be blocked until the user turns 18.

The Monzo account doesn't offer any in-credit interest, but it does offer fee-free spending and fee-free cash withdrawals (up to £200 a month) abroad. Monzo also offers real-time spending updates and tools to categorise your monthly outgoings so you can analyse your spending habits.

Like Starling Bank, the Monzo account is quick to open. You just need to download the app, enter a few details and verify your identity.

You'll get issued with a sort code and account number and be able to set up standing orders and Direct Debits straight away. Your Mastercard (compatible with Google Pay and Apple Pay) will come through in the post in two to three days.

What you should know about opening your first account

At 16, you can apply for a current account independently, but most high street providers require you to visit a branch to open the account - so you might prefer the convenience Starling Bank and Monzo offer.

Teenagers under 18 won't get access to overdraft facilities on any current account, so they can be a safe way to get to grips with handling money before upgrading to an adult account.

Payments will usually be declined if there isn't enough money in the account, but if a payment does go through the bank shouldn't charge any fees or interest.

Some accounts offer the choice of a cash card or debit card, but if you want to shop online, you'll need a debit card.

In the past, banks offered piggy banks and free school bags as incentives but today the most common perk is credit interest. It's worth noting, however, that most children savings accounts can beat these rates.

How other bank accounts for teens compare

Nationwide - a Which? Recommended Provider - offers the FlexOne current account to those aged 11-17.

You can earn 1% AER credit interest on balances up to £1,000 and get the choice of a cash or debit card. The account can only be opened in a branch if you are 11-13, but is available to open online for those aged 14.

TSB offers an Under 19s current account, which pays 2.5% AER on balances up to £2,500 and 0.1% AER on balances over £2,500 - but you can only open the account in a branch.

The Santander 123 Mini is open to 11-17-year-olds. It pays tiered interest; you'll get 1% AER on balances up to £100, 2% AER on balances up to £200 and 3% AER on balances between £300 and £2,000.

The Halifax Expresscash account (available to 11-17-year-olds) currently pays 1.5% AER on balances but this will fall to 0.5% AER and be limited to balances up to £2,500 from 24 September.

Similarly, the and Lloyds Bank Under 19s account (11-18) currently pays 1.5% AER on balances up to £2,500 but the rate will be cut to 0.5% AER on balances up to £2,500 from 24 September.